South Africa says it will sign long-term coal supply contracts by next year

These will include contracts for its two new 4,800MW coal-fired power stations

CAPE TOWN (Reuters)  - 

South Africa expects to sign long-term supply contracts for its coal-fired power stations, including two new 4,800 MW plants, by the end of next year, Public Enterprises Minister Barbara Hogan said on Monday.

State power utility Eskom has commissioned the new Medupi and Kusile power stations as part of a 385 billion rand expansion programme, to help meet rising demand in Africa's largest economy battling with power shortages.

"It is expected that the long-term contracts for the current fleet of coal fired power stations, including Kusile and Medupi, will be finalised by the end of 2010," Hogan said in a written reply to parliament questions.

"Medium-term contracts, 5 to 10 years, are used to fill in the gaps," she said.

Hogan said out of about 200 "sources of coal" less than ten offered more than the billion tonnes coal requested by Eskom, which expected to invest up to 110 billion rand in coal mining by 2020 and dig at least 40 new mines in that time to meet growing demand.

South Africa, one of the world's top coal exporters, relies on coal for 90 percent of its power, making it Africa's worst polluter.

© Thomson Reuters 2009 All rights reserved

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